Democrats fighting again over QEIA and SIG funds

The state's struggle to find the money needed to fund the Quality Education Investment Act program has provoked an emerging dispute among Democrats that could lead to an immediate cut of $153 million to some participating districts.

At issue are concerns raised by state Sen. Denise Ducheny, chair of the Joint Legislative Budget Committee, that some districts enrolled in the QEIA program received more than their share of state funds following a complex and much debated resolution for the use of federal School Improvement Grant money left over from prior fiscal years and not yet spent.

Ducheny contends that legislation signed by the governor a year ago required the California Department of Education to use the leftover SIG funds to support QEIA schools where the two programs overlapped.

In a letter to the State Controller John Chiang last week, she said the SIG money was not used properly and she asked the controller to reduce the upcoming revenue limit apportionment for a like amount among those districts that are participating in both programs.

But another key Democrat, Bob Blumenfield of Van Nuys and vice chair of the joint budget committee has written his own letter to Chiang saying that he does not support Ducheny's position and specifically asks Chiang not to make adjustment.

The California Teachers Association along with Los Angeles Unified have also sent letters to Chiang opposing Ducheny's proposal.

A spokesman for the controller said Tuesday that the office was still looking into the issue and has not yet made a decision on what to do.

In a phone interview Tuesday, Ducheny said the problem is the controlling state law, ABX3 56, which called on the department of education to reduce funding to QEIA schools that were also getting the federal SIG support.

That's what the law says and it wasn't followed," said Ducheny, D-San Diego. "Here it is a year later and we have to figure this out. Our problem is compliance with that law."

She said that it was the Legislature's intent to give more money to all school districts not to provide additional funds to those in the QEIA program and that the CDE didn't follow their direction.

Hilary McLean, spokeswoman for State Superintendent of Public Instruction Jack O'Connell, said the CDE did follow the law.

"As we informed the Legislature back in February, the state law clearly requires the CDE to determine to the extent to which federal dollars can be used to satisfy QEIA," McLean said. "We determined that federal dollars cannot be used for this state purpose."

Ducheny said she was open to considering other solutions and suggested the issue might be something that could be brought up in the current budget negotiations.

QEIA, a state program born out of a 2006 lawsuit settlement between Gov. Arnold Schwarzenegger and the CTA, costs the general fund about $350 million a year to provide special services to about 500 low-performing schools.

The SIG program, which was significantly revised by the Obama administration this year, is a federal program also aimed at a state's lowest performing schools many of which also receive support from QEIA.

Because of the clear overlap, there have been a number of recent proposals to replace state general fund money with the federal SIG money to fulfill the legal requirements of the QEIA settlement.

In June, Senate Democrats proposed using $165 million of SIG money awarded to California this year to pay for QEIA schools enrolled in both programs - an idea that ran into strong opposition largely from the CTA.

The teachers' union is taking a similarly strong position against Ducheny's new plan.

In a letter to Chiang last week, CTA legislative advocate Estelle Lemieux argued that there had been no overpayment to schools enrolled in both programs because each is entirely different with distinct goals and guidelines and thus, federal supplanting rules would apply.

LAUSD Superintendent Ramon Cortines, in a letter to Chiang this week, pointed out that if Ducheny's proposal is approved his district would lose $49 million, which would need to be cut from the existing 2010-11 budget.

"More troubling," he said, "this proposed cut is directed solely at a program serving some of this state's most socioeconomically disadvantaged and impacted students."

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